Generation Start-up: How Akeed is transforming the online food delivery business in Oman
Starting Oman’s first online food delivery platform Akeed was not easy for its founders. Gaurav Nahar, Moosa Al Lawati and Darshan Puranik struggled with a number of issues from lack of funding to a shortage of workers at the time of its launch.
“I remember I spoke to about 40 investors before I finally got one investor who believed in our vision and believed in the kind of value that we wanted to bring to the market,” Mr Nahar says, remembering the initial days of the company.
The start-up also experienced staff shortages in the initial days as the founders worked to build it up.
“Myself … Darshan all of our team members, used to even work as drivers because initially, we were short on drivers. We used to wait till evenings for some orders and do the deliveries.”
“We also worked in all the other departments, like the call centre [to receive orders], marketing, developing everything … the setup initially.”
Akeed — an Arabic word that means “sure” in English — overcame those challenges and was launched in 2018 with seed funding of $120,000. The start-up, which initially tied up with 15 restaurants to deliver food, has since grown its partner network to 1,500 currently, capitalising on a burgeoning online food delivery market.
The global online food delivery market is expected to grow 11 per cent to reach $192.16 billion in 2025, according to the Business Research Company’s online food delivery services Global Market Report 2021.
In Oman, the online food delivery market is estimated at about $250 million, and there is a lot of opportunity for companies like Akeed to grow, Mr Nahar says.
Apps related to e-commerce as well as food delivery businesses have just started to penetrate the market in Oman “creating a lot of initial scale in the market”, he says. “The market is seeing a hockey stick kind of growth [sudden rapid growth after a long period of linear growth] and it’s very similar to other markets like Kuwait where a lot of people actually keep dining out.”
In Oman, statistics show that, on average, a person eats out 3.5 times a week in restaurants. The trend is also expected to benefit the online food delivery business, Mr Nahar adds.
Currently, Oman’s online food delivery market is dominated by Talabat, a top regional player, and Akeed. There are also a couple of other companies which are trying to gain a foothold in the market.
“Oman is still a developing market and the smartphone penetration has happened very significantly in the last three to four years,” Mr Nahar says. The trend will benefit the online food delivery business with a “significant growth potential.”
But despite the sultanate’s blossoming potential, Mr Nahar admits there were challenges, particularly amid the Covid-19 pandemic that led to widespread movement restrictions globally to curb the health crisis.
“Every year we have been growing … for the first three years, then, the pandemic had hit us a little hard, although pandemic has been successful for food delivery apps, in Oman, it was a little challenging. They had very severe lockdowns … 24-hour lockdowns for consecutive days. So that hurt our business,” Mr Nahar says.
The slowdown in business due to pandemic also affected its funding process. However, it overcame the challenges and raised $2.5m from investors including Oman’s Phaze Ventures and IDO Investments last year.
Set up in 2018, Phaze Ventures is the first private venture capital firm in Oman which is focused to fund early-stage disruptive technology companies worldwide. The firm targets early-stage start-ups in the Middle East and North Africa, Europe and North America with total funds of $30m.
IDO Investments focuses on investing in established start-ups globally. It has investments in non-invasive weight loss solution company Allurion, online car sales company Carzaty and clinical genomic analytics platform Congenica, among others.
Food delivery start-ups “require a lot of funding … there was a very limited appetite in the market. So that delayed some of our funding plans and finally materialised only in September, October 2021. But now things are back on track. We are in discussions with a GCC player on a merger and acquisition deal. So that’s going to make us bounce back much more into the market,” Mr Nahar says.
He did not name the company that Akeed is in discussions with.
“Those are just happening and it’s almost formalised. You will hear a big announcement very soon,” he says.
This deal is will change the start-up ecosystem in the sultanate and more investors will be encouraged to invest in technology companies, Akeed’s founder says.
Mr Nahar, who grew up in Oman, decided to start Akeed with Mr Al Lawati after noticing a gap for an online food delivery app in the country. There were no food delivery apps in Oman, even though the market offered great potential and despite the success of such apps in other Gulf countries.
“We thought that this is a kind of a tried and tested concept and a very successful concept outside of Oman. So, we both wanted to get out of the whole corporate job and then start something new … start something that could add value to the market, to our personal life as well. That’s why we took this entrepreneurship route of starting something new,” says Mr Nahar, who was working as an assistant manager at global consultancy PricewaterhouseCoopers prior to starting Akeed.
The founders conducted intensive research before launch and “even validated the problem in the market by talking to restaurants, talking to the customers and what kind of challenges or problems they are facing in terms of food delivery”.
“We got enough validation from the market that this is a needed service in the market. We started registering the company and started talking to a lot of investors before we finally launched in March 2018 after the initial funding.”
Akeed currently employs 300 drivers and has a cumulative customer base of 200,000 people in Oman.
“Future will be much better for us because we have international funds coming into the country and into our company. Maybe we will be able to spend a lot more than what we were doing before,” to boost growth, Mr Nahar says.
Q&A with Gaurav Nahar, co-founder and chief executive of Akeed
Where do you see yourself and the company in the next five years?
It’s all about the funding … it’s like a car keeps needing fuel to run. The new brand that is going to be part of Akeed [after merger and acquisition] is going to definitely want to expand across the GCC. We also want to change the game in terms of food delivery. We want to open up more verticals and services that other players are not offering and hence, set ourselves to be different.
How do you define your company?
This company is driven by passion, driven by a mission to change the [start-up] ecosystem of Oman. As we were the first movers in the market, we will also be the first tech company to get an M&A [deal]. We really want to make a difference in terms of whatever service and value that we were providing to the market.
What new skills have you learnt in the process of starting the company?
I don’t have any kind of background in being a chief executive or managing a tech company, managing so many people or staff. So definitely [starting the company] has helped me mature as a person in how to deal with different people, and how to deal with your board as well. It teaches you a lot about corporate governance. It teaches you everything about a business, in and out, from start to such a big scale.
What successful start-ups do you wish you could have started?
India’s Byju is an amazing start-up. Swiggy is also another one … a very adamant and very fierce competitor to Zomato, and that’s why they have reached the level that they have. Amazon is, of course, another “very initial” tech company and was a big game-changer.
What is your mantra for success?
Loving what you do first is very important. Automatically, you will have a very good chance of becoming successful. Planning your business properly is also very important for success. Being in the right environment, where the ecosystem supports you, as an entrepreneur, is also extremely important as well as hiring a great team.
Who are your role models in the business world?
Jeff Bezos, Elon Musk and Ratan Tata. These are the people I follow.